Rabo Agrifinance, LLC v. Sukhraj Pamma, et al.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 RABO AGRIFINANCE, LLC, No. 2:24-cv-01392-DJC-CKD 12 Plaintiff, 13 v. ORDER 14 SUKHRAJ PAMMA, et al., 15 Defendants. 16 17 Plaintiff Rabo Agrifinance, LLC has filed a motion for temporary restraining 18 order seeking the appointment of a temporary receiver. Plaintiff previously provided 19 loans to several Defendants to this action, and Plaintiff claims that they ultimately 20 defaulted on those loans. Plaintiff now seeks the appointment of a receiver to secure 21 collateral located at 6188 Luckehe Road, Live Oak, California 95953, as well as the 22 issuance of a temporary restraining order. 23 For the reasons stated below, Plaintiff’s Motion to Appoint a Temporary 24 Receiver and Motion for Temporary Restraining Order are granted. 25 BACKGROUND 26 Plaintiff asserts that beginning around July 5, 2016, Plaintiff extended a 27 revolving line of credit to Defendant Sutter Buttes Mercantile LLC (“SBM”), which 28 operates a walnut processing plant. Defendant Sukhraj Pamma signed the loan 1 documents on behalf of Defendant SBM as its manager. SBM’s line of credit was 2 secured with various SBM property which includes the real property 6188 Luckehe 3 Road, Live Oak, California 95953, and items of personal property located there. There 4 does not appear to be a dispute that Defendant SBM defaulted under the terms of 5 two separate loan credit agreements and remains in default. Plaintiff and Defendants 6 later entered into a Forbearance Agreement where Plaintiff agreed to forebear any 7 further enforcement actions for a period of time and Defendants, including SBM, 8 acknowledged the amount and fact of their default. The forbearance period 9 ultimately lapsed without the loan obligations being satisfied. As a result, Plaintiff is 10 seeking to recover outstanding principal and accrued interest on the defaulted loans 11 through enforcement of the security agreements. The Court previously granted 12 Plaintiff’s request to attach the collateral located at the 6188 Luckehe Road address. 13 Plaintiff has now filed a Motion to Appoint a Temporary Receiver and Motion for 14 Temporary Restraining Order. Briefing on those Motions is now completed. (Mot. 15 (ECF No. 75-1); Opp’n (ECF No. 83); Reply (ECF No. 85).) On May 20, 2026, the Court 16 held oral argument, at the conclusion of which, this matter was submitted. 17 MOTION TO APPOINT TEMPORARY RECEIVER 18 I. Legal Standard 19 The appointment of a receiver is an extraordinary equitable remedy that is 20 applied with caution. Canada Life Assurance Co. v. LaPeter, 563 F.3d 837, 844 (9th 21 Cir. 2009) (citing Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314 (8th 22 Cir. 1993)). In determining whether a receiver should be appointed, courts look to a 23 variety of factors. Most commonly referenced is the non-exhaustive list of factors 24 provided by Canada Life Assurance Co. v. LaPeter. Canada Life identifies the 25 following as relevant factors: 26 (1) whether the party seeking the appointment has a valid claim; (2) whether there is fraudulent conduct or the 27 probability of fraudulent conduct by the defendant; (3) 28 whether the property is in imminent danger of being lost, 1 concealed, injured, diminished in value, or squandered; (4) whether legal remedies are inadequate; (5) whether the 2 harm to plaintiff by denial of the appointment would 3 outweigh injury to the party opposing appointment; (6) the plaintiff's probable success in the action and the possibility 4 of irreparable injury to plaintiff's interest in the property; and, (7) whether the plaintiff's interests sought to be 5 protected will in fact be well-served by receivership. 6 Id. at 844 (cleaned up). Additionally, and of particular relevance in this case, while a 7 party’s prior consent to the appointment of a receiver is not dispositive of whether the 8 Court should appoint a receiver, such consent is still “a factor that commands great 9 weight” in the Court’s analysis. Sterling Sav. Bank v. Citadel Dev. Co., 656 F. Supp. 2d 10 1248, 1260 (D. Or. 2009) see also KS StateBank Corp. v. Peters, No. 25-cv-02576-PHX- 11 ROS, 2025 WL 3294967, *9 (D. Ariz. Nov. 26, 2025) (collecting cases). 12 II. Discussion 13 As a starting point here, there is no dispute that Defendant SBM previously 14 agreed to terms that included consent to the appointment of a receiver and an 15 agreement to not oppose a request that a receiver be appointed.1 While this is not 16 dispositive, it is nevertheless a factor of substantial weight in weighing the other 17 Canada Life factors. 18 Turning to those other factors, first, there appears to be no dispute that Plaintiff 19 has a valid claim. Second, there is no clear direct indication of fraudulent conduct. 20 That said, it appears that Defendant Sukhraj Pamma, owner of SBM, may have failed to 21 include a lease on the subject property in his bankruptcy proceedings (see Reply at 4– 22 5), and the oral argument counsel for the Trustee assigned to the bankruptcy case 23 noted that the Trustee had faced difficulty in obtaining information from Mr. Pamma. 24 While not overwhelming evidence of the probability of fraudulent conduct, these 25 26

27 1 During oral argument, Defendant’s counsel conceded that opposing the present motion may itself constitute a contractual violation by Defendant. This is not of direct relevance to the present Motion 28 but is of some note. 1 actions in the bankruptcy proceeding heighten the Court’s concern of possible future 2 fraudulent conduct. 3 Third, the ongoing usage of the processing plant and its equipment necessarily 4 results in a reduction of the value of that collateral.2 Fourth, the availability of legal 5 remedies is a neutral factor; while it is undisputed that SBM’s liabilities are greater 6 than its assets, it is unclear at this point whether Plaintiff’s claims are oversecured or 7 undersecured at this stage. Fifth, the potential harm to Plaintiff in denial outweighs 8 the harm to Defendant in the appointment of a receiver. While there may be some 9 impact on third parties who will face a delay (but not spoliation) in their walnuts being 10 processed, Defendant has not established any harm to SBM in the appointment of a 11 receiver. 12 Sixth, it appears likely that Plaintiff will succeed in this action and that failure to 13 appoint a receiver might result in irreparable injury. Given the fact that Defendant 14 Sukhraj Pamma is presently in bankruptcy proceedings and SBM is likely insolvent, 15 there is substantial risk to Plaintiff’s ability to ever recover the amounts Defendant 16 owes. Seventh, a receivership is well suited to protect Plaintiff’s interests. While 17 Defendant may ultimately be correct that the receivership will be short-lived, it is 18 unclear at this stage whether that is true. Given the risks posed by SBM’s apparent 19 insolvency and the potential for the diminished value of collateral through the 20 ongoing operation of the plant, the interests will be well-served by a receivership. 21 The Court finds that all of the Canada Life factors are neutral or favor the 22 appointment of a receiver. With the additional factor of Defendant’s consent to a 23 receivership, to which the Court affords great weight, appointment of a receiver is 24

25 2 In their Motion, Defendants make passing mention to the possibility that certain items including “equipment, fixtures, accounts, contract rights, documents of title, instruments, inventory, general 26 intangibles, proceeds, and books and records relating to the Collateral” might be “concealed, transferred, moved and/or secreted.” (Mot. at 11.) Counsel for the bankruptcy trustee seemed to 27 indicate similar concerns at oral argument about access to more accurate records at the processing plant. However, given the general nature of these suggestions, the Court does not make its 28 determination on this basis. 1 clearly appropriate. Accordingly, Plaintiff’s Motion to Appoint Temporary Receiver is 2 granted. 3 MOTION FOR TEMPORARY RESTRAINING ORDER 4 I. Legal Standard 5 A temporary restraining order may be issued upon a showing “that immediate 6 and irreparable injury, loss, or damage will result to the movant before the adverse 7 party can be heard in opposition.” Fed. R. Civ. P. 65(b)(1)(A). In determining whether 8 to issue a temporary restraining order, courts apply the factors that guide the 9 evaluation of a request for preliminary injunctive relief: (1) likelihood of success on the 10 merits; (2) irreparable harm in the absence of preliminary relief (3) the balance of 11 equities and (4) the public interest. See Winter v. Natural Res. Def. Council, Inc., 555 12 U.S. 7, 20 (2008); see Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 13 839 n.7 (9th Cir. 2001) (explaining that the analysis for temporary restraining orders 14 and preliminary injunctions is “substantially identical”). 15 II. Discussion 16 In addition to appointment of a receiver, Plaintiff also requests the issuance of a 17 Temporary Restraining Order restraining Defendant SBM, its agents, or any third 18 parties from interfering with the receiver’s performance of his duties as well as from 19 removing, concealing, transferring, encumbering, or otherwise making collateral 20 unavailable. For many of the reasons discussed above the Court will also grant this 21 request. Plaintiff has shown a likelihood of success on the merits of their claim that 22 Defendant SBM defaulted on the loan. Given the likely insolvency of SBM and the 23 potential for depreciation of collateral, Plaintiff has also established the potential for 24 irreparable harm in the absence of preliminary relief. The balance of equities here 25 also clearly weighs in Plaintiff’s favor. The public interest factor is mixed given the 26 potential impact on third-party growers, but this impact does not outweigh the other 27 factors favoring the issuance of a temporary restraining order. Accordingly, Plaintiff’s 28 Motion for Temporary Restraining Order is also granted. 1 CONCLUSION 2 For the reasons stated above, IT IS HEREBY ORDERED that: 3 1. Plaintiff’s Motion to Appoint a Temporary Receiver (ECF No. 75) is 4 GRANTED; 5 a. Temporary Receiver — Vito Mitria (“Mr. Mitria”) and Beacon 6 Management Advisors, LLC (“BMA”) (collectively “Receiver”) are 7 appointed temporary receiver of all the personal property 8 identified in Exhibit A attached to Plaintiff’s Proposed Order (ECF 9 No. 75-6) and incorporated herein by this reference (hereinafter, 10 the “Collateral” or the “Receivership Estate”) and generally located 11 at 6188 Luckehe Road, Live Oak, Sutter County, California 95953 12 (hereinafter, the “Property”). 13 b. Receiver’s Bond and Oath — Before entering upon his duties, 14 Receiver shall: 15 i. Execute and file a receiver’s oath to perform his duties 16 faithfully; and 17 ii. File a bond issued by a surety in the sum of $10,000.00 to 18 the effect that he will faithfully discharge his duties as 19 Receiver in this action and obey the orders of this Court. 20 c. Receiver’s Fees — Receiver shall be entitled to interim 21 compensation for his services at the hourly rates stated in Exhibit B 22 attached to Plaintiff’s Proposed Order (ECF No. 75-6), or in such 23 subsequent orders as the Court may enter, and shall be 24 reimbursed for all reasonable expenses incurred by them on 25 behalf of Receivership Estate. 26 d. Prohibited Agreements — Receiver shall not enter into any 27 agreement with any party to this Action about the administration 28 of Receivership Estate or about any post-receivership matter. 1 e. Initial Inventory — Within 30 days after filing his oath and bond, 2 Receiver shall file an inventory of all property possessed under this 3 Order. 4 f. General Duties — After qualifying, Receiver is authorized and 5 empowered to gain access to the Property to take possession and 6 control of the Collateral, and its proceeds, including the books 7 and records of defendant SUTTER BUTTES MERCANTILE, LLC, a 8 California limited liability company (“SBM” or “Defendant”), and to 9 take all actions necessary to, among other things, enforce RABO’s 10 rights to the Collateral including, but not limited to, collecting it, 11 demanding and collecting proceeds of the Collateral, and taking 12 all measures necessary and appropriate to hold, preserve, 13 process, assemble, insure, prepare for its sale or lease, or 14 otherwise dispose of the Collateral. For the avoidance of doubt, 15 Receiver is empowered to take control and possession of SBM’s 16 bank accounts and bank statements, and contact SBM customers 17 regarding accounts receivable and their proceeds, as well as 18 existing inventory being stored or in process. Receiver is 19 authorized to endorse checks payable to SBM, to send notice to 20 account debtors directing the same to make payments due to 21 SBM which are part of RABO’s Collateral or the proceeds thereof 22 to Receiver, to take whatever actions are reasonable and 23 necessary to collect the SBM accounts receivable, and to 24 compromise the amounts owing from account debtors when in 25 Receiver’s reasonable business judgment it is appropriate to do 26 so. Receiver is also empowered to identify any personal property 27 on the Property not belonging to SBM and make arrangements for 28 its removal or return to its rightful owner(s) or lessor(s). 1 Receiver may perform the duties, activities and tasks of a 2 Receiver in this case. Receiver is authorized to employ servants, 3 agents, employees, and clerks; without further leave of court, to 4 bring suit in his own name as Receiver deems necessary to 5 protect, preserve, and maintain the rights, privileges and property 6 of Receivership Estate; to compromise debts and to do all things 7 and to incur the risks and obligations ordinarily incurred by 8 owners, managers, and operators of similar property and that no 9 such risk or obligation so incurred shall be the personal risk or 10 obligation of said Receiver but shall be a risk or obligation of 11 Receivership Estate. 12 g. Periodic Reporting — Receiver shall prepare periodic interim 13 statements reflecting Receiver’s fees and administrative costs and 14 expenses incurred for said period in the operation and 15 administration of Receivership Estate herein. Upon completion of 16 an interim statement, and mailing said statement to the parties’ 17 respective attorneys of record, Receiver shall pay from Estate 18 funds, if any, the amount of said statement. Despite the periodic 19 payment of Receiver’s fees and administrative expenses, said fees 20 and expenses shall be submitted to the Court, for its approval and 21 confirmation, in the form of either a noticed interim request for 22 fees, stipulation among the parties, or Receiver’s Final Account 23 and Report. 24 h. Additional Duties — Receiver is authorized and directed to collect 25 and open all mail of SBM relating to SBM’s business and/or the 26 Collateral, and Receiver shall hold all monies coming into his 27 possession to be expended for the following purposes and in the 28 following priorities: 1 i. for the expense of administering the Receivership Estate; 2 ii. for all expenses incurred by Receiver in protecting and 3 preserving the Collateral; 4 iii. for interim Receiver’s fees to be paid monthly and to be 5 paid by Receiver from such funds as are in his possession; 6 and 7 iv. the remainder of funds to be deposited into a depository 8 designated by the Court entitled, “Receiver’s Account”, 9 together with the name and number of the action, pursuant 10 to Local Rule 232, until further order of the Court. 11 i. Borrowing Funds — Receiver is expressly authorized to borrow 12 from RABO such funds as are necessary to perform his duties. No 13 obligation on the part of RABO to advance or loan funds to 14 Receiver herein shall arise prior to Receiver’s preparation of a 15 budget for management and operation and the approval of said 16 budget by RABO. Receiver is authorized to and shall issue to 17 RABO Receiver’s certificates as evidence of receivership 18 indebtedness. All Receiver’s certificates shall be executed and 19 delivered by Receiver as a condition to funding, and shall be 20 numbered in sequential order, for redemption purposes. All 21 indebtedness represented by a Receiver’s certificate shall have 22 priority over all other liens on Receivership Estate. Further, all 23 sums advanced and represented by a Receiver’s Certificate shall 24 bear interest at the same rate that interest currently accrues under 25 the SBM promissory note(s) which are the subject of this Action. 26 All such advances made by RABO shall also be deemed advances 27 for the protection of RABO’s Collateral, and as such shall be 28 secured by the SBM Security Agreements and any other security 1 instruments with a priority equal to the priority of the original 2 obligation(s) secured thereby. 3 j. No Preparation of Tax Returns — Receiver is not authorized nor is 4 he empowered to file or prepare tax returns or pay taxes on behalf 5 of SBM. 6 k. Employment of Counsel and Other Professionals — Receiver may 7 employ counsel, accountants and other professionals upon order 8 of the Court approving such employment pursuant to Local Rule 9 232. 10 l. Court Instructions — Receiver, or any party to this action, may, on 11 due notice to all parties, make application to this Court for further 12 orders instructing Receiver and/or for additional powers necessary 13 to enable Receiver to perform Receiver’s duties properly. 14 m. Insurance — SBM shall notify Receiver at the time Receiver takes 15 possession of the Collateral of the type(s) and amount(s) of 16 insurance coverage thereon. If Receiver determines sufficient 17 coverage exists, SBM shall be responsible for and is hereby 18 ordered to make certain that Receiver is named as an additional 19 insured on such policy for the entire period that Receiver shall be 20 in possession of the Collateral. If Receiver determines the 21 insurance coverage insufficient, it is hereby ordered that Receiver 22 shall have fifteen (15) business days from his qualifying 23 appointment to procure adequate insurance on the subject 24 property; during such period, Receiver shall not be responsible 25 for claims arising with respect to the subject property, or for the 26 procurement of insurance. If Receiver discovers sufficient 27 insurance coverage does not exist, Receiver shall notify RABO in 28 writing of the lack of adequate insurance coverage for the 1 Collateral. Receiver may thereafter procure such insurance 2 coverage as he deems sufficient. If Receiver does not have 3 sufficient funds to obtain insurance, Receiver shall seek 4 instructions from the Court on whether to obtain insurance and 5 how it is to be paid. 6 n. Enforcement of Order — The United States Marshal is directed and 7 ordered to assist Receiver in every capacity in which said Marshal’s 8 assistance may be required to enable said Receiver to take and 9 safely keep possession and control of the Collateral which is the 10 subject of this receivership. Receiver may also present this Order 11 to such other law enforcement as he may deem appropriate in 12 furtherance of his duties under this Order. 13 o. Bank Accounts — Except as stated above, Receiver may establish 14 accounts at any financial institutions insured by an agency of the 15 United States government that are not parties to this proceeding 16 and deposit such funds as come into his possession for 17 expenditures set forth herein, with the remainder to be deposited 18 in the Receiver’s Account depository designated above. 19 p. Taxpayer ID — Receiver may use any federal taxpayer identification 20 numbers relating to SBM or the Collateral for any lawful purpose. 21 q. RABO’s Notice of Termination — RABO shall notify Receiver in 22 writing within 48 hours of any event within its knowledge that 23 terminates the Receivership Estate. 24 r. Receiver’s Final Report and Account and Discharge 25 i. Motion required — Discharge of Receiver shall require a 26 court order upon noticed motion for approval of Receiver’s 27 final report and account and exoneration of Receiver’s 28 bond; 1 ii. Time — Not later than 60 days after the receivership 2 terminates, Receiver shall file, serve, and obtain a hearing 3 date on a motion for discharge and approval of the final 4 report and account; 5 iii. Notice — Receiver shall give notice to all persons of whom 6 Receiver is aware who have potential claims against 7 Receivership Estate; 8 iv. Contents of Motion — The motion to approve the final 9 report and account and for discharge of Receiver shall 10 contain the following: 11 1. Declaration or Declarations — A declaration or 12 declarations: (a) stating what was done during the 13 receivership, (b) certifying the accuracy of the final 14 accounting, (c) stating the basis for the termination of 15 the receivership (such as foreclosure or 16 reinstatement), and (d) stating the basis for an order 17 for the distribution of any surplus or payment of any 18 deficit; and 19 2. Accounting Summary. A summary of the receivership 20 accounting, which shall include (a) the total revenues 21 received, (b) the total expenditures identified and 22 enumerated by major categories, (c) the net amount 23 of any surplus or deficit, and (d) evidence of 24 necessary supporting facts. 25 s. Disclosure — RABO shall promptly notify Receiver in writing of the 26 names, addresses, and telephone numbers of all parties who 27 appear in the action and their counsel. The parties shall give 28 notice to Receiver of all events that affect Receivership Estate. 1 t. The Receiver shall cooperate with the bankruptcy Trustee and 2 provide the bankruptcy Trustee with all necessary access to the 3 books and records of Defendant SBM. 4 2. Plaintiff’s Motion for Temporary Restraining Order (ECF No. 75) is 5 GRANTED. 6 a. SBM and its respective members, agents, servants, employees, 7 representatives, and all persons acting under and in concert with, 8 or for them, are restrained and enjoined until further order from 9 engaging, and committing or performing, directly or indirectly, all 10 of the following acts: 11 i. Interfering, hindering or molesting in any manner 12 whatsoever said Receiver in the performance of any duties 13 incidental thereto; 14 ii. Demanding, collecting, receiving, or in any way diverting or 15 using any of the payments, income and revenue from any of 16 SBM’s accounts receivables or other amounts due SBM; 17 iii. Exercising any control whatsoever over the Receivership 18 Estate and doing any act that will impair the preservation of 19 the Receivership Estate or RABO’s interest in the Collateral; 20 and 21 iv. Transferring, removing, concealing, transferring, secreting, 22 encumbering or otherwise disposing of or making 23 unavailable any of the Collateral or any part thereof 24 pending the hearing on the OSC or further order of this 25 Court. 26 b. SBM and its respective members, agents, servants, employees, 27 representatives and all persons acting under and in concert with, 28 or for them, shall cooperate with Receiver and comply with his 1 requests for information and documentation relating to the 2 Collateral. 3 c. SBM and its respective members, agents, servants, employees, 4 representatives and all persons acting under and in concert with, 5 or for them, shall, upon entry of this Order, turn over to Receiver 6 possession of all information relating to accounts receivable 7 and/or any other amounts due SBM from any source. 8 d. Given the limited scope of relief ordered, the Court finds no 9 amount of bond is necessary. 10 3. On or before April 1, 2026, Defendants are ordered to show cause why a 11 Preliminary Injunction should not be entered on the same terms. Plaintiff 12 may file a reply on or before April 3, 2026, after which this matter will be 13 submitted without further oral argument. 14

15 Dated: May 22, 2026 /s/ Daniel J. Calabretta THE HONORABLE DANIEL J. CALABRETTA 16 UNITED STATES DISTRICT JUDGE 17

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